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Identifying the causes of trends in construction labour productivity

This article originally appeared in BSRIA’s Delta T Magazine, published in January 2016. It was written by Lee Bryer (CITB), James Hastings (Experian), Doug Forbes (WLC Ltd) and Malcolm Horner (WLC Ltd).

This article describes work undertaken by Whole Life Consultants Ltd (WLC Ltd) to identify the trends in productivity, what their causes might be, and what action needs to be taken if productivity is to be improved.

Figure 1 shows total construction output in constant 2005 prices and productivity expressed as output per hour worked, both normalised to 1978 values, the first year for which consistent statistics are available. In each case a straight regression line has been fitted to the data. This shows that the compound rate of growth in output has been 1% for the past 36 years, whilst the compound rate of increase in productivity has been approximately 0.5% over the same period.

[Fig 1: Long term output and productivity trends]

Figure 2 shows changes in productivitymeasured in terms of Gross Value Added (GVA at constant 2011 prices) per average number employed during the year for the period 1998 to 2013, the only years for which GVA is available.

[Fig 2: Trend in productivity measured in terms of GVA per hour worked]

Figure 3 shows the relationship between productivitymeasured in terms of total output per person employed and output for the period 1978 to 2014. The confidence level in the linear regression is greater than 99%.

For convenience, we have divided the potential causes of changes in productivity into external and internal factors. External factors relate to the organisational or industrial environment whilst internal factors are those that are clearly within the control of sitemanagement.

Delays may take one of two forms: interruptions, which bring work to a complete standstill, and disruptions which slow work down without causing an interruption. The major causes of interruptions are shown in Figure 8. Interruptions lasting less than 15 minutes have no impact on productivity, but those lasting more than 15 minutes cause an average loss of productivity approaching 30 % during the time that men remain at work. This is thought to result from the time lost in closing down and starting up an activity when an interruption takes place. Disruptions cause a loss of productivity of about 25%.

The size of the labourforce has different impacts on productivity depending on whether any increase was planned or unplanned. A doubling in the size of the workforce that is properly planned in advance causes a loss of productivity of about 2½% whilst an unplanned doubling in size causes a loss of productivity of ten times that amount.

Constructionproductivity in general has increased by about 1% year on year for the past 16 years, but the evidence for individual trades is mixed and unreliable. The strong correlation between productivity and overall output of the industry overshadows other factors. Nevertheless, it can be argued that all of the internal causes of changes in productivity are the result of management actions. Delays can be avoided by goodplanning. Working hours and the size of the workforce are decided by management.